The decision to buy a house is one of the biggest decisions you will ever make. Here are five key things to keep in mind:
1. What is the seller telling you about the house?
Sellers used to provide disclosure statements, telling buyers about the condition of the home and disclosing problems. These days, lawyers advise against this, because of the potential for lawsuits. Some sellers are doing home inspections before they list the property for sale and giving a copy of the report to any buyer.
This helps sellers because they can correct problems noted by the inspector and so they do not have to negotiate with the buyer later. Some sellers are also providing history reports, which can be obtained from homeverified.com orIverify.com which indicate whether the home has been the subject of an insurance claim for water, fire, flood or sewage backup, and if the home was ever listed as a grow house or meth lab.
The more information a buyer has in advance, the more informed the purchase decision. Still, even with this information, you should do your own home inspection before committing to any purchase.
2. Ask hard questions
Ask the sellers or their agent if they have had basement flooding problems, mould or roof leaks, even if the leaks have been repaired. Also ask whether there was a suicide or murder in the home, or if there’s a halfway house down the street. Watch how they answer. Sellers are required to respond truthfully to direct questions. If the seller refuses to answer or acts suspiciously, then you need to discuss this with your home inspector and your real estate agent and either adjust your purchase offer or walk away.
3. Talk to the neighbours
During your inspection, or before you put in an offer, walk around and ask people about the house you are interested in and the neighbourhood. Sellers may still try to hide things they think will lower their property value. Ask neighbours if they noticed any major repairs at the home over the past year. Also ask whether there are neighbourhood issues, such as the “neighbour from hell”. You may also want to know if there are many basement apartments on the street and whether this complies with local bylaws. Search the property address online to see if anything negative comes up.
4. Put everything in writing
Make sure everything you expect on closing is included in your offer. This includes mirrors, closet organizers, window coverings and TV brackets. Ask for two complete sets of keys. Make sure the seller understands they cannot replace any item before closing. Also add that the property must be left in a clean and broom swept condition, so that you do not have to pay to remove the seller’s junk. Consider paying two deposits, the first upon acceptance of the offer and the second once you waive your home inspection condition. Some sellers have been refusing to release a buyer’s deposit when a buyer has cancelled a deal as a result of a home inspection report.
5. Make sure you can afford it
Talk to a mortgage broker or your bank so that you know how much you can safely borrow. Make sure your lender will complete their appraisal of the property before you waive any financing condition. Be careful about getting caught up in a bidding war, because if your lender thinks you paid too much, they will not lend you what you may be expecting.
By following these tips, you should be better protected the next time you buy a home.